Gap, Inc. (GPS)

We maintain Outperform recommendation on Gap, Inc. (GPS - Analyst Report) as we anticipate the company to perform well above the market. The Gap is the leading player in the highly fragmented specialty retail sector, and has a market cap more than double its nearest competitor.

The company has improved its business model by realigning its inventory to sales trends. In addition, the company has a strong balance sheet with adequate liquidity and no outstanding debt. The Gap has also been active on the share buyback front and has been paying a steady dividend.

However, consumer discretionary spending would continue to be under severe stress, which limits the upside potential of the company. Our six-month target price is $24 per share.

Gap, Inc. (GPS) : FULL ANALYST REPORT

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